Economy is looking up, local analyst says

KALAMAZOO — There must be some good economic news out there somewhere, right?

Local economist George Erickcek delivered on a pledge to track down “promising numbers” about the national and Kalamazoo economies Monday for a presentation to the Kalamazoo Rotary Club.

“Things are looking up both nationally and locally,” Erickcek, senior regional analyst for the W.E. Upjohn Institute for Employment Research, told club members during a meeting at the Radisson Plaza Hotel & Suites in downtown Kalamazoo.

Nationally, the economy is growing again, with third-quarter, gross-domestic product up 3.5 percent, he said. Home construction is beginning to turn around, and the stock markets have experienced a strong rebound off the lows of last spring.

In Kalamazoo, home sales in October were up for the first time in a year, home construction is up, new claims for unemployment insurance are declining, and a West Michigan index of new business orders has been positive, he said.

Yet, it’s not all good news, Erickcek said — though he stuck with his pledge, adding a positive spin to the bad news and drawing chuckles from the audience:

Banks, which are sitting on $1 trillion in reserves, have a lot of money to lend.

The rate of decline in employment is slowing.

Consumer confidence isn’t “dismal.”

The automotive industry will be better next year.

Michigan’s economy probably won’t be as bad next year.

Erickcek said that despite the state of Michigan’s economic problems, Kalamazoo’s pool of talented people give the region a reason to be hopeful about the future.

“In times of economic competition … this is very important,” he said.

But keeping that edge requires a long-term investment.

The Kalamazoo Promise scholarship program is an example of having a long-term vision and being able to wait for an investment to pay returns, Erickcek said. The true impact of The Promise won’t be felt in Kalamazoo until today’s school children have gone to college, gained experience elsewhere and returned to the area as the community leaders of tomorrow, he said.

“Talent (development) truly matters, but it takes time and money,” he said.Asked about the top three reasons for Michigan’s economic problems, Erickcek answered: “Autos, autos, autos.”

But U.S. Rep. Pete Hoekstra, who was attending the meeting as a guest, disagreed. The Holland Republican is running for the GOP’s nomination for governor.

“I wouldn’t say it’s all autos,” Hoekstra said.

Michigan’s tax policy, bureaucracy and ineffective Legislature have hampered investment by making it costly, inefficient and unpredictable to do business here, he said.